Dawn Ritch, ContributorMIRANT WANTS to sell up and get out of Jamaica after five years. This is an inestimable piece of good fortune for the island.
Mirant is the 80 per cent owner of the Jamaica Public Service (JPS), sole supplier of electricity to the island. The other 20 per cent is in the hands of the Government.
'Sole', 'exclusive', 'monopoly,' any way you slice it, the JPS ought never to have been sold, much less to a foreign investor. Anybody who wants to leave our having affordable electricity to a non-Jamaican should immediately be made a resident of the Bellevue Hospital.
Charles Matthews, former head of the JPS, had a party in his honour and displayed a board entitled '(His) Jamaican Walk.' On it was mounted a bounty of cartoons by Clovis, most of them no doubt on the high cost of electricity. The expression on Matthew's face as he pointed to them in a photograph published elsewhere, was that of a whooping Red Indian, ecstatic at the sheer range and quantity of scalps erected in his honour.
I am tempted to award him the plaque inscribed 'Most Abysmal Boor'. This is with more than a little regret, since I had reserved it for outgoing Prime Minister the Most Honourable P.J. Patterson. It would have been for presiding over gross public disorder, wanton criminality, abject poverty and the sell-out of the cement, electricity and domestic financial sectors to foreigners.
FINE DISREGARD FOR JAMAICANS
The lashes upon our backs come from the whip of the island's first so-called black prime minister. Charles Matthews, himself a black American, has come to personify that fine disregard for our predominantly black population, and a contempt which beggars all understanding. As a foreigner, he is not to be entitled to such licence. Delight in being publicly scorned must remain the peculiar preserve of a Jamaican prime minister brought to public office in a national poll.
It appears Mr. Matthews thought himself in charge of us. He behaved as though we were some ship at sea, over which temporal estate he had complete and personal command. Barefaced bumptiousness such as his cannot go unremarked.
Mirant bought JPS, our largest state-owned enterprise, some people have argued, for less than it was valued. Some weeks ago, Mirant, via its Jamaican subsidiary, borrowed US$180 million overseas guaranteed by JPS, according to its offering circular dated June 20, 2006, on the strength of its monopoly, and "the structure of (its) tariffs." The latter refers to the many different and several escalation clauses contained in our electricity bills, and sanctioned by the Patterson administration.
Mirant announced locally that the loan would pay out local debt to RBTT and NCB, and result in reduced rates to consumers. In short order thereafter, they also announced that they were selling their 80 per cent interest in JPS.
BUYING INDEBTEDNESS
Whoever or whatever now buys the company, also buys this indebtedness, or contingent liability on its books. I am currently at a loss, therefore, to see how this can lower our rates, no matter how merry or how huge the celebrations of Mirant in their five-year ownership of JPS.
Months ago, they must have known they planned to sell. To arrange a huge loan, that will ultimately have to be re-paid by the Jamaican consumer is, therefore, a most unworthy and callous corporate course to have pursued.
This can, in no way, be deemed appropriate. It is, however, in the best traditions of American carpet-bagging, stripping a company and then spitting out the pips.
HUGE UP-FRONT FEES
The huge up-front fees paid by JPS to arrange the deal for this loan for Mirant seems to have caused the latter not a moment's hesitation. Fees were paid to attorneys-at-law, consultants of every stripe, all foreign of course, to say nothing of Credit Suisse, Mirant's investment bankers.
In June, they borrowed money on our guarantee, and then in July, they're gone. This formerly bankrupt company has announced, quite shamelessly, that they plan to take the cash and buy back their outside stock in the United states. In this way, they say, they will improve shareholder value.
I believe we, as taxpayers, have more value than they could ever hope to achieve. As electricity rate payers, we are a captive market that caused salivation and financial salvation for them. On the next go-round, a salutary lesson exists on how we choose the people with whom we keep company.
Mirant is in the throes of reselling this asset on the backs of the Jamaican people. I can just about put up with it from Patterson. In Mirant, I find it an insufferable humiliation.
The Mirant JPS Finance Limited, an off-shore company formed in the British Virgin Islands and which raised this loan, is technically without an income. It is not a subsidiary of the JPS. This adds insult to injury to have to know that the Jamaica Public Service Company Limited has guaranteed this facility to an overseas company owned by a foreign investor. We're now saddled with repaying their debt.
P.J. Patterson has left us a terrible legacy with this sale, and the chickens are now coming home to roost. This country may, in the not too distant future, have cause to be elated about having Mrs. Simpson Miller as prime minister. She is not obligated to follow slavishly the former prime minister's policies. She has said she will be seeking her own mandate, and Mirant's intention to sell may very well provide her with the opportunity to repatriate JPS as part of that mandate.
Left to me I wouldn't pay them more than a hand of bananas for it. And since Matthews so relishes fanfare, perhaps somebody could be persuaded to sing him the Banana Boat song at the airport.
